Siemens to bid for South African LNG-to-power projects

Siemens reportedly engaged potential partners to bid on the US$3.7 billion LNG-to-power project scheme proposed by the South African Department of Energy.

The process has started, Sabine Dall’Omo, Siemens South Afrika CEO told Bloomberg in an interview, adding that South Africa is looking for foreign investment.

South Africa is looking to procure 3,126 MW of new IPP gas-fired generation capacity, according to an information memorandum published by the DoE. Following studies with Transnet National Ports Authority, DoE selected the ports Coega and Richards Bay, where selected bidders would develop, finance, construct and operate gas-fired power generation plants.

According to the DoE timetable, bidders will prequalify in April and a final request for proposals is set for August 2017.

The energy generated by the gas-fired power generation plants will be purchased by Eskom, South Africa’s power utility.

The selected bidders for the two projects will be responsible for LNG supply, provision of the floating storage and regasification facilities (FSRU), supporting port facilities and gas transmission pipelines.

Dall’Omo said that the company will require clarity when it comes to the role of the power utility Eskom, that previously refused to sign a deal for a solar-power plant that already received governmental approval.

She added that the most complex element of the project would be the financing around the gas as LNG is priced in US dollars, and financing includes hedging the foreign currency risk associated with liquefied natural gas purchases.